Average mortgage rates today are virtually unchanged since Friday’s opening. The only scheduled report we received today is a good one for interest rates. Retail Sales for September (0.6 percent increase predicted) underperformed drastically, coming in with just a .1 percent rise. That means less spending, less inflation.
|Conventional 30 yr Fixed||5.0||5.011||Unchanged|
|Conventional 15 yr Fixed||4.583||4.603||Unchanged|
|Conventional 5 yr ARM||4.563||4.969||Unchanged|
|30 year fixed FHA||4.792||5.802||Unchanged|
|15 year fixed FHA||3.938||4.89||+0.06%|
|5 year ARM FHA||4.0||5.384||-0.1%|
|30 year fixed VA||4.833||5.031||Unchanged|
|15 year fixed VA||4.125||4.441||Unchanged|
|5 year ARM VA||4.438||4.755||Unchanged|
|Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
This economy this morning is mixed and neutral except for gold price increases, which favor interest rates.
Mortgage rates have been rising overall for some time. But recently, they have dropped into more favorable territory, good news if you are closing soon. This may be one of those blips that allow you to get a better deal than you expected. If you need another day or two to drop into a better-priced tier, say from 1 30-day lock to a 15-day lock, you can probably safely wait a day or two. The news here is pretty neutral and this week’s reports are not that important.
In a rising rate environment, the decision to lock or float becomes complicated. Obviously, if you know rates are rising, you want to lock in as soon as possible. However, the longer your lock, the higher your upfront costs. If you are weeks away from closing on your mortgage, that’s something to consider. On the flip side, if a higher rate would wipe out your mortgage approval, you’ll probably want to lock in even if it costs more.
If you’re still floating, stay in close contact with your lender, and keep an eye on markets. I recommend:
This week is likely to be less driven by scheduled economic reports following last week’s bombshell of the monthly Employment Situation report. But there is always politics to throw monkey wrenches in our best-laid plans. Stay in contact with your lender and keep one eye on the markets if closing soon.
Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.
For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.”) That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.
The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is now five percent.
The buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.
However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.
Imagine that you have your $1,000 bond, but you can’t sell it for $1,000 because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:
The buyer’s interest rate is now slightly more than seven percent. Interest rates and yields are not mysterious. You calculate them with simple math.Verify your new rate (Oct 15th, 2018)
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
2018 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)